INTEGRATED SAFEGUARDS DATASHEET

APPRAISAL STAGE

I. Basic Information

Date prepared/updated: 11/02/2011 / Report No.: AC6498
1. Basic Project Data
Original Project ID: P113220 / Original Project Name: Productive Safety Net APL III
Country: Ethiopia / Project ID: P126430
Project Name: Productive Safety Nets Program (APL III) Additional Financing
Task Team Leader: Wolter Soer
Estimated Appraisal Date: December 9, 2011 / Estimated Board Date: February 28, 2012
Managing Unit: AFTSP / Lending Instrument: Adaptable Program Loan
Sector: Other social services (93%);Public administration- Other social services (5%);Public administration- Agriculture, fishing and forestry (2%)
Theme: Social safety nets (86%);Rural non-farm income generation (8%);Natural disaster management (3%);Vulnerability assessment and monitoring (3%)
IBRD Amount (US$m.): 0.00
IDA Amount (US$m.): 270.00
GEF Amount (US$m.): 0.00
PCF Amount (US$m.): 0.00
Other financing amounts by source:
BORROWER/RECIPIENT 0.00
Financing Gap 256.50
256.50
Environmental Category: B - Partial Assessment
Repeater [X]
Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) / Yes [ ] / No [X]

2. Project Objectives

The overall objective of the Productive Safety Net Program (PSNP) is to contribute to reducing household vulnerability and improving resilience to shocks and promote sustainable community development in food insecure areas of rural Ethiopia. This will be achieved through continued consolidation of a safety net system that (i) provides timely, predictable, and appropriate transfers to beneficiary households, thereby enabling effective consumption smoothing and avoiding asset depletion; (ii) creates productive and sustainable community assets that contribute to the large-scale rehabilitation of severely degraded areas; (iii) stimulates local markets through demand linkages; (iv) establishes more effective responses to drought shocks to avoid increasing destitution among affected households; and (v) integrates and effectively supports critical interventions that build assets, promote increased productivity, and encourage diversification at the household level.

The specific Project Development Objective for APL III is: Improved effectiveness and efficiency of the Productive Safety Net Program and related Household Asset Building Program (HABP) for chronically food insecure households in rural Ethiopia.

The higher-level goal to which the PSNP aims to contribute is sustainable graduation from food insecurity for a large number of households in the Program.

In May 2011, the Government requested that the Bank consider an additional financing of US$270 million for FY2012. The objectives of this Additional Financingare:

# The proposed US$270.0 million additional financing will contribute towards filling the existing financing gap of US$ 526.46 million. Additional support from other partners is under preparation to close the remaining gap.

# These resources will allow IDA to continue to finance and strengthen the PSNP APL III, which unlike the previous two phases includes the Household Asset Building component that requires significant effort and resources. The additional resources will allow IDA to continue to strengthen design and efficiency aspects of the PSNP to achieve its objectives of improving food security, using a multisectoral approach. Further, it will enable PSNP to incorporate more firmly a systematic disaster risk management and climate adaptability agenda into the social safety nets program of Ethiopia.

# The additional financing will also ensure that the program maintains its ability to provide timely resources for transitory food insecurity in response to shocks within existing program areas. Part of the additional financing will be used to replenish the risk financing facility of the program, which has been triggered to respond to transitory needs related to the current drought situation.

3. Project Description

The PSNP and HABP are targeted to 8.3 million chronically food insecure citizens, roughly 10% of the population, who reside in 320 rural woredas (out of 800 nationwide) in eight of Ethiopia#s ten Regions. APL III includes four components, which the Additional Financing will continue financing:

1. Component 1 (US$120 million): Safety Net Grants will provide cash and in-kind transfers to chronically food insecure households through: (i) labor intensive public works for able-bodied households; and (ii) direct support to labor-poor households. This component will also provide performance incentives to woredas to improve the timeliness and predictability of transfers to households.

2. Component 2 (US$140 million): Drought Risk Financing aims to provide timely resources for transitory food insecurity in response to shocks within the existing program areas. This component will be financed using a contingent grant, which will provide resources for scaling up activities under Component 1 in response to localized or intermediate weather or price-related shocks in PSNP woredas.

3. Component 3 (US$5 million): Institutional Support for the PSNP will support institutional strengthening activities focusing on (i) program management at all levels; (ii) capacity building to fill any remaining gaps in general and those specific to the Risk Financing facility; (iii) monitoring and evaluation; and (iv) transparency and accountability.

4. Component 4 (US$5 million): Support to the HABP will finance a core set of interventions aimed at: (i) strengthening the delivery of demand-driven and market-oriented advice for household investments; (ii) improving the efficiency and effectiveness of financial service delivery to food insecure households; and (iii) supporting program management.

Around 80% of beneficiaries would participate in labor-intensive public works, building productive community assets that are planned within a watershed management framework. These community activities will include micro- and small-scale area closures/woodlots, agro-forestry, soil and water conservation measures such as hillside terracing and soil bunds, mulching of degraded areas, gully control, community roads, stream diversions, shallow wells, spring development, small dams, water ponds, drainage canals, vegetative fencing, fodder system collection, multi-purpose nurseries, construction and repair of classrooms, health posts and latrines, and the construction of child care centres. Around 20% of beneficiaries would be from labor-poor households including elderly, chronically sick or otherwise incapacitated households and these would receive transfers as Direct Support.

Under the HABP, households have access to business-planning support and micro-credit to engage in household asset-building activities such as animal fattening, bee-keeping, and other income-generating activities.

4. Project Location and salient physical characteristics relevant to the safeguard analysis

The Project will be country-wide. Public works activities under the PSNP and under the HABP will be carried out in 320 woredas in Oromia, Amhara, SNNPR, Tigray, Afar, Somali, and Harar Regional States, and Dire Dawa City Administration, in locations selected on specific criteria outlined in the Government's PSNP Program Implementation Manual.

5. Environmental and Social Safeguards Specialists

Mr Ian Leslie Campbell (AFTSP)

6. Safeguard Policies Triggered / Yes / No /
Environmental Assessment (OP/BP 4.01) / X
Natural Habitats (OP/BP 4.04) / X
Forests (OP/BP 4.36) / X
Pest Management (OP 4.09) / X
Physical Cultural Resources (OP/BP 4.11) / X
Indigenous Peoples (OP/BP 4.10) / X
Involuntary Resettlement (OP/BP 4.12) / X
Safety of Dams (OP/BP 4.37) / X
Projects on International Waterways (OP/BP 7.50) / X
Projects in Disputed Areas (OP/BP 7.60) / X

II. Key Safeguard Policy Issues and Their Management

A. Summary of Key Safeguard Issues

1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts:

From an environmental and social safeguard standpoint, the proposed operation is a Category B project, since impacts of the project, for the most part, will be minimal and manageable to an acceptable level.

One of the key objectives of the PSNP is to address the underlying causes of food insecurity, to which land degradation is universally agreed to be a major contributor, particularly in highland areas. Thus the design of the PSNP public works program, is intended to have environmentally positive impacts. Indeed, these activities, which include, for example, soil and water conservation, land reclamation and improvement of community infrastructure, have already been shown to constitute a vehicle for significant environmental transformation and enhanced productivity.

It is nonetheless common knowledge that past mass-mobilization efforts in environmental rehabilitation in Ethiopia have sometimes failed or have been abandoned, as a result of which the environment has returned to its degraded state. Furthermore, negative impacts may occur if the locations or designs of the community activities do not follow good environmental practice, or if they are incompatible with optimum overall management of the watershed. Typical negative impacts that might occur from the micro- and small-scale community activities include the following:

Small-scale Irrigation Development Impacts

# Changes in natural drainage patterns upstream and downstream

# Depletion of surface or groundwater sources

# Deterioration in soil quality due to poorly managed irrigation; potential waterlogging and salinisation of soils, leading to agricultural abandonment and land degradation

# Runoff from irrigated fields and potential for agricultural chemicals to pollute water bodies

# Abstraction effects on source streams and related aquatic ecosystems

# Lowering of water quality due to agricultural runoff

# Increased pest and disease control problems due to the promotion of monoculture

# Reduced biodiversity due to focus on cash crops

# Potential for disturbance of cultural and historic sites and resources, and damage to nearby sites resulting from changes in the water table or salinisation.

# Stagnant waters and disease vectors arising from poorly managed irrigation systems

# Increased use of agricultural chemicals with related human health concerns

Watershed Treatment and Water Harvesting Impacts

# Increased access can aggravate soil erosion problems, especially in higher gradient topography

# Poorly maintained drainage controls and in-stream structures can lead to eventual failures and increased flooding problems

# Reduced downstream nutrient levels from dams that reduce stream transport of organic material and sediment

# Social tensions arising from issues and rights of water allocation

# Mosquito and related health concerns arising from stagnant pools

# Impacts on cultural and historic sites and resources through changes in the water table

# Social problems arising from poorly managed regenerated catchment areas

Community Road Construction and Rehabilitation Impacts

# Alteration of drainage patterns and increased flooding and soil erosion from road construction and materials excavation sites

# Right of way removal of vegetation and natural habitats

# Sedimentation of aquatic systems from soil erosion and runoff

# Impact of increased human use on adjacent habitats and wildlife

# Voluntary displacement or minor loss of access to resources normally used by individuals or the community for cultivation, livestock grazing, fuel wood, etc.

# Stagnant pools at excavation sites that create breeding sites for mosquitoes

# Potential for disturbance of cultural and historic sites and resources

# Increased in and out population migration due to improved access

# Unplanned, haphazard land use development created by improved access

Note: Projects requiring relocation of residents or involuntary loss of assets or access to assets are not included in the PSNP.

Afforestation and Revegetation Impacts

# Effects of some tree species (e.g., eucalyptus) in reducing groundwater levels

# Long term effects of forest harvesting on hydrologic systems and stream characteristics

# Possible reduction in tree and plant species diversity arising from the introduction of new plantations and re-vegetation schemes

# Effects of monocultures on ecosystem diversity, function and sustainability

# Changes in habitat characteristics and potential effects on endemic wildlife species

# Social problems arising from issues related to the ownership and user of new forests

# Potential replacement of open access forests and access to NTFPs with restricted access forests and woodlots

# Effects of grazing bans on the cost of rearing livestock and shift of grazing pressures to other areas

Livestock, Pasture and Water Points Development Impacts

# Compaction of soils from increased activity around new water sources

# Potential contamination of water sources and needs for controls on human use

# Concentrations of livestock at specific watering sites/routes that result in overgrazing of vegetation and related land degradation

# Potential social tensions over access to pastoralists water sources

Drinking Water Sources Development Impacts

# Increased water withdrawals could exceed groundwater recharge rates in some areas

# Development of springs may affect availability of downstream water supply

# Physical impacts of increased human traffic near water stations

# Potential contamination of open wells by livestock and human uses

# Reduced availability of aquatic ecosystems due to water abstraction

# Increased dependence on new water supply systems that prove to be unreliable

# Sanitation and health concerns associated with the operation of new drinking water sources

# Land use and social issues and tensions over the siting of and access to new water sources

School and Health Facilities Rehabilitation Impacts

# Site disturbance and potential drainage alterations from construction activities and expansion of facilities

# Water shortages due to increased demands on existing sources

# Increased production of human and medical wastes and potential for contamination of waterbodies and groundwater

# Increased timber harvesting on nearby lands for construction materials

# Construction impacts on sensitive wildlife habitats and aquatic systems

# Water supply development impacts on aquatic ecosystems

# Increased pollution from site development and operations, including medical waste

# Sanitation and health issues related to increased human presence and medical waste disposal

# In-migration and settlement generated by rehabilitated facilities

To address such issues, the approach to the environmental performance and sustainability of the public works program is three-pronged:

(i) Public works are planned using a community-based approach to integrated watershed management, a process which forms the basis of the awareness-creation and training program, supported by a budget to provide technical and material inputs.

(ii) Standards to be followed in the design and implementation of the individual public works are established in Community-Based Participatory Watershed Development Guidelines published by the MOARD. These are made available to concerned woreda staff and Development Agents, who are trained in the techniques set out in the Guidelines. These Guidelines include detailed provisions for area closure, which are based on participatory community planning of all activities. This provides for community management of the closed areas to allow farmers and families whose traditional access has been voluntarily reduced to have continued access to the closed area for the collection of fodder and other forest products, in order to ensure that there is no reduction in livelihoods.